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Dan Caplinger is an attorney and financial planner covering retirement, ETFs, personal finance, and general investing for the Motley Fool. With nearly 20 years of diverse experience as a tax and estate planning lawyer, trust administrator, personal financial advisor, and independent consultant, Dan has developed a healthy skepticism of the mainstream financial industry and aims to make complex legal and financial concepts easier for his readers to understand. Dan has worked with the Motley Fool since 2006 as a retirement, tax, and investing expert with a focus on introducing new investors to the opportunities of smart financial planning.

As baby boomers start hitting age 65, putting off retirement for a few years has become all the rage. But even if you're pessimistic about your financial prospects, you may not need to wait as long as you might think to retire securely.

Americans' opinions are quite negative about their retirement prospects. A survey from Wells Fargo (WFC) found that a quarter of the people it surveyed believed they'd need to work until they're 80 to be financially comfortable. Three-quarters expect to work during their retirement years, and while some of those are people who simply want to keep working, the majority say they'll need to do so to cover necessary expenses or to keep up their standard of living.

Yet a new study from the Center for Retirement Research paints a more positive picture for prospective retirees. The news wasn't allgood, as the study found that fewer than half will be able to retire at 65.

Workers should take heart, though, because for many of those who can't afford to retire at 65, just a few more years of work will make a huge difference. The study noted that by age 70, 86% of households should be financially prepared.

What's the Difference?

Putting in a few extra years on the job has a number of positive impacts on your finances. Consider:

An extra year of paychecks covers living expenses for that year, keeping you from having to tap your nest egg.

Working longer also lets you put more of your earnings aside, boosting your savings even further.

If your employer provides health insurance, it can save you a bundle versus paying your own premiums. Other employee benefits can also help.

An extra year of work between ages 62 and 70 lets you defer Social Security benefits, increasing your eventual monthly check by about 8% per year when you finally take it.

Even with these positives, there are still some big reasons to worry. When you hit your 60s, Social Security may no longer provide the same level of benefits that current law gives retirees. Moreover, even if you wantto work, you may not be able to find a job that gives you everything you need.

Nevertheless, for those who dohave control of their careers, the decision of when to retire really makes a big difference. The right choice can give you a lot more confidence about your financial future.

Ninth place was virtual tie, but Maine offers lower property taxes than the No. 8 state. It does, however, have higher income taxes. The governor has said he wants to make retirement income tax-exempt in Maine, but it hasn't happened yet.

New York wins (or, rather, loses) the toss-up with Maine because of its median property taxes -- the fourth highest in the nation -- and general tax burden. Generous exemptions for Social Security and pensions, as well as a high standard deduction, count in the Empire State's favor. Cost of living, of course, and the bitter winters are heavy strikes against New York -- unless you're rich, or a member of the Polar Bear Club.

The blight in the Garden State: taxes. New Jersey levies the nation's highest median property tax ($6579), and has the highest income tax burden as well, according to the Tax Foundation. On top of that, it's facing a big budget deficit, and features a lofty cost of living. But most pension and Social Security income is tax-exempt for couples making less than $100,000.

The Bay State is often called "Taxachusetts," and with good reason: Property taxes are among the nation's highest, and the flat rate applied to earnings beside Social Security, which is exempt (like government pensions, but not private ones), can prove costly indeed.

Rhode Island's scenic too, but is facing choppy economic waters, with underfunded pension and health care liabilities, as well as budget deficits. This despite the fact that the Ocean State has the fifth highest median property taxes paid.

The Prairie State is in dire fiscal straits, with terrible figures for pension funding, deficit spending, unemployment and foreclosures. The official response out of the capital in Springfield? An increase in income taxes. Most pension and Social Security income is not taxed in Illinois, but the state's 5% flat tax eats into other earnings, such as investment income.

Motley Fool contributor Dan Caplinger has no idea when he'll decide to retire. He owns no shares of the companies mentioned above. You can follow him on Twitter here. The Fool owns shares of and has created a covered strangle position in Wells Fargo. Motley Fool newsletter services have recommended buying shares of Wells Fargo.

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dollibug

WOW....the government must think we are all CRAZY******they want you to work until you DROP DEAD....so all of the moneys that have been paid into SS can be kept for a rainy day.....and the government can then *SAVE* it to spend on whatever they want to. HOW DUMB IS THIS????? SS is like insurance....they want to COLLECT but they DO NOT WANT YOU TO DRAW.....

Why would anyone wait til they are 70 to collect SS? Full SS is avail between ages 66-67 (depending on when you were born). If you are still interested in working until age 70, you can put the SS check in savings. If you don\'t collect until age 70, you are giving up $75K-$100K (based on SS of $2000/mo) to collect an extra $800 (approx) mo at age 70. While an extra $800 mo sounds good, $100,000 in the bank is much better. Is my thinking flawed?

And what rate of interest would that SS check be drawing in a savings account? I am currently NOT drawing my SS and plan on getting as close to 70 as I can while it grows at 8% a year. That's better than any savings account rate I can find . I am nearly 67, still working, making as much as I want with no restrictions, putting 30% of each paycheck into my 401K (this is a huge plus) and drawing a spousal benefit from my husband of over $1k a month. So see, I AM collecting, just not my own. Retirement is all about planning and this includes researching the best SS claiming strategies out there for yourself. Unless you absolutely have to claim at 62 because of poor health or need the money, delaying your SS benefit can only work in your favor.

The article clearly ignores there is simply no choice for many who hit 62-66. Depending on their lifetime earnings and resulting monthly benefit, many just cannot live on $800-1200 a month. So working until they drop is not some cerebreal choice.

That's about the stupidest retirement article I've ever read.Using their theory, if you work until you are 100 years old, you'll really have a great retirement.At 75, I've found how each year you can do less. So you want to retire as soon as you can do so safely, so that you get to enjoy at least a few years of your retirement. (Before your kids put you in a nursing home).

I just retired from a part time union job, and getting a pension, still working a full time job and planning to apply for SS, and continue to work full time, I need the SS benefits to help with all my expenses, I am 62 now,single mom , never on govt. assistance.

Never heard anyone on their deathbed say that they wished they would have worked longer. At some point, working is a waste of time and effort. It is called quality of life and for me that is retirement at age 68.

You would be damn lucky to keep a real job after 55. No one but Wal-Mart(minimum wage) will hire older workers. If you have to keep working it will be for peanuts, and at a job where you are treated poorly.

Keeping elders in the full time workforce beyond today's "full retirement age" of 66 or 67 for social secuirty purposes will do great harm to the Millenial Genraration. It already is. Boomers and Olders are staying in full time jobs.This is dramartically slowing up hires and promotions for younger people , and espeically veterans, who desparately need jobs to pay off huge student loans and who are approaching prime child rearing age. Post 65 Boomers should be encouraged to work part time so that they can continue to mentor entyry level workers, but forcing them to work to age 70 is harmful to society. Social Security is not facing an huge crisis inthe short term. Lifting the cap of $110,000 which is subject to FICA tax and lowering the FICA tax rate to 5 or 5.5 percent would go a long way to correcting he system. If that is not enough, the incomes of elders should be means tested before they receive Social security. People with incomes over ,say,$500,000 a year don't need much,if any, social security.Think About Warren Buffet, The Koch Brothers, Bill gatges, Sheldon Adelson and the like.They need social security like I need a hole in my head